Introduction to Form 990 and Filing Requirements
The Form 990 is an annual information return that most tax-exempt organizations, including nonprofits and charities, must file with the Internal Revenue Service (IRS). The form provides the public with financial information about the organization, including income, expenses, and assets.
The IRS uses the Form 990 to assess compliance with tax laws and to identify potential issues, such as excessive compensation or unrelated business income. Failure to file the Form 990 or filing it late can result in penalties, so it's essential to understand the filing requirements and deadlines.
Form 990 Filing Deadlines and Due Dates
The due date for filing the Form 990 depends on the organization's tax year. For calendar-year filers, the Form 990 is due on May 15th of each year. For fiscal-year filers, the form is due on the 15th day of the fifth month after the close of the tax year.
It's crucial to note that the IRS considers the postmark date or electronic submission date as the filing date. If the due date falls on a weekend or federal holiday, the form is due on the next business day.
Requesting an Extension for Form 990 Filing
If an organization needs more time to file the Form 990, it can request an automatic six-month extension by filing Form 8868, Application for Extension of Time to File an Information Return. The extension request must be filed by the original due date of the Form 990.
The IRS will automatically grant the six-month extension, and the organization will not need to provide a reason for the request. However, the organization must still file the Form 990 and pay any applicable penalties and interest by the extended due date.
Penalties for Late Filing or Failure to File Form 990
The IRS imposes penalties on organizations that fail to file the Form 990 or file it late. The penalty for late filing is $20 per day, up to a maximum of $10,000 or 5% of the organization's gross receipts, whichever is less.
In addition to the late filing penalty, the IRS may also impose a penalty for failure to file the Form 990. This penalty can be up to $10,000 per year, and it's imposed on organizations that fail to file the form for three consecutive years.
Best Practices for Filing Form 990 and Avoiding Penalties
To avoid penalties and ensure compliance with IRS regulations, organizations should establish a routine for filing the Form 990. This includes maintaining accurate financial records, preparing the form well in advance of the due date, and submitting it electronically.
Organizations should also review the Form 990 instructions and guidelines carefully to ensure they're completing the form correctly. If an organization is unsure about any aspect of the filing process, it should consult with a tax professional or the IRS directly.
Frequently Asked Questions
What is the deadline for filing Form 990?
The deadline for filing Form 990 depends on the organization's tax year, but it's typically May 15th for calendar-year filers.
Can I request an extension for filing Form 990?
Yes, you can request an automatic six-month extension by filing Form 8868, Application for Extension of Time to File an Information Return.
What are the penalties for late filing or failure to file Form 990?
The penalties for late filing are $20 per day, up to a maximum of $10,000 or 5% of the organization's gross receipts, and failure to file can result in a penalty of up to $10,000 per year.
How do I file Form 990 electronically?
You can file Form 990 electronically through the IRS website or through a third-party provider, such as a tax preparation software.
What happens if I miss the deadline for filing Form 990?
If you miss the deadline, you'll be subject to penalties and interest, so it's essential to file as soon as possible and pay any applicable penalties and interest.
Do I need to file Form 990 if my organization is exempt?
Most tax-exempt organizations, including nonprofits and charities, must file Form 990, but some organizations, such as churches and certain government entities, are exempt from filing.